Innovate or Regulate
New technologies and their impacts require guidance and answers to complex and global issues
by Tatiana Revoredo and Rodrigo Borges
We are currently living a moment of substantial social transformations, many of them due to technological breakthrough generated from the Internet advent that has radically modified the way people relate to each other, interact and do business.
The technological and social transformations have never occurred in such an accelerated speed, with the more and more frequent outbreak of disruptive innovations that merely alter overnight behaviors or businesses, what not even the “Moore’s Law” could foresee. We are facing the era of innovations in exponential scale where the speed is enormous and the advances are limitless.
In 1965, the Electronics Magazine published an article of an American engineer at the time, Mr. Gordon Earl Moore, who would become one of the founders of the giant in processors, Intel Corporation. At the time, Moore launched what we know today as the “Moore’s Law.” According to the engineer, the number of transistors in a chip would double every 18 months, keeping or reducing the production cost. That is to say that according to Moore, every 18 months technology would double its capacity, lowering the cost of production.
“Moore’s Law” then started to be applied to measure the speed of technological evolution. However, as time passed by and with the constant computational evolution, “Moore’s Law” has become obsolete as far as the technological advancements surpassed the time of evolution foreseen by Moore. Nowadays, the technical outbreaks occur in a much smaller period compared to that of the referred law; after all, less than 15 years ago we could not even imagine outbreaks such as Google, Facebook, Smartphones, Whatsapp, Netflix, Uber, Tesla, etc.
If in the laws of physics and Science the scientists and scholars estimate an exponential growth by revisiting rules and concepts established long ago, would it be possible that in the world of Law the legislators are worried about issuing new regulations that consider these outbreaks and speed in transformations?
Culturally, in Brazil, we look for regulating the most we can, being one of the countries with the most active Legislative branch in the process of drawing up legislation, aiming at “closing” gaps and regulating all possible variables one can imagine. However, this culture is counterproductive, once the constant social evolution makes the law of yesterday inefficient today, a fact that is even more latent when it involves technological aspects.
Cryptocurrencies (Bitcoin) and Blockchain were the big subjects of 2017 in the technological and economical scope, due to the valorization and relevance reached, most importantly for being a new technology that is revolutionizing the way of doing business, controlling assets and, mainly, transferring funds.
Although it is a new technology yet in development, as every moment new functionalities come up, in 2015, when little was known about it, the draft bill No. 2.303 was presented at the House of Representatives, in which there was an attempt to equate this technology to airline miles, considering them mere payment arrangements.
In less than three years from the proposition of the mentioned draft bill, the Blockchain technology and the cryptocurrencies provoked advances much further from its use as payment arrangements, making it evident that the urge for regulation., without the knowledge about all the nuances produced by new technologies, may harm the development of the country.
In this sense, while much is said about the possible regulation of this new technology in Brazil, little is talked about how it must be and for which direction this legislation must turn. It seems that regulating new punctual aspects of the technological advance prematurely would not be the best way to proceed.
Recently, the Minister of the Supreme Court, Mr. Vilas Bôas Cueva, promoted a debate with professors from the University of Frankfurt, Germany, where themes such as fake news and Internet protection were discussed. Much was talked about regulation of new technologies and the difficulty of elaborating a rich regulatory chart facing the speed of the technological transformations. Although it was not the focal point of the debate, the scholars manifested in the line of principle-implicit legislations, instead of categorical, precisely for trying to avoid the delay of transformation potentialities that new technologies make possible.
The police efficiently adopted by our Legislative on the occasion of the Draft Bill 2.303/2015, nevertheless, demonstrates to walk towards an opposite direction to the considerations made by the German scholars and, also, to the legal procedure that resulted in the “Brazilian Internet Law”.
It is important to highlight here that since its onset until its effective regulation, 20 years later, the Internet — perhaps the main communication, business and interaction mean among people — has undergone autoregulation. Alias, the judiciary was regulating it case by case, by noticing the habits and customs of the society until the approval of the “Brazilian Internet Law” (Law No. 12.965) in 2014.
Imagine if, in the advent of the Internet, we had prohibited its utilization due to state control in telecommunications. What would be the impact of that on the competitiveness of the country and to the Brazilian society?
Just to mention the minimum, the Brazilian companies — which generate uncountable employment and growth in the country — would not afford to survive the Digital Era. That is because, since the year 2000, 52% of the companies in the list of Fortune 500 have been acquired, have lost relevance, or have gone into bankruptcy due to the evolution and exponential growth of technology (Deloitte. In “Exploring Strategic Risk: A global survey”, 2013, p. 3.)Thus, it seems to us that final legislation, punctual and disconnected from our new frameworks incorporated to the society by new technologies, may not only put the country behind schedule but also in a dangerous underdevelopment position.
At this point, our Central Bank comes out very mature and coherent by positioning itself with caution about the “cryptocurrencies” and the Blockchain technology. Bulletin No. 31.379 of 11/16/2017, mentions that, “so far, the need of regulation has not been identified by the international agencies,” and that, “in Brazil, for the time being, no relevant risks to the National Financial System are observed.” Our monetary authority has also highlighted that they are being mindful to the evolution, as well as following the discussion in international forums about the subject to adopt eventual measures if that is the case, observing the attributions of the relevant public bodies and entities. In addition, at the end of the referred Bulletin, it affirms “its commitment to supporting financial innovations, including the ones based on new technologies that make the financial system safer and more efficient.”
It is true that before, time was more generous regarding reflections and the timing of decisions about our problems, even allowing us to change the chosen direction without the needed maturity. Nowadays, on the contrary, our communication capacity (immediate and constant) ends up generating faster and faster decision and action expectations, summed up to the need of reassuring the society through the law (legislating to obtain the ultimate end of social peace).
Such expectations and need, however, sometimes stumble upon the unawareness of all the required factual overview to the understanding of a determined issue, a moment in which rush may lead to an innocuous and inefficient regulation.
New technologies and its financial and cultural impacts demand orientation and answers to complex and global questions that have little to do with personal talents, but more with the leadership of an ample debate around the principles and values shared by the majority of the countries and governments.
That is why the debates regarding new technologies must demand amplitude, not only of deepness and knowledge but also of different perspectives. As it happened in the legal discussions that resulted in the “Brazilian Internet Law”. Against a whole culture of lengthy and categorical regulations, Law No. 12.965/2014 primarily consists of norms with sturdy principle-related and guidelines, essential to the resolution of material issues left by the legislator under the care of the doctrine and courts that, going by habits and customs, allow the development of the virtual world without barriers of legislative nature.
In this picture, caution is the best positioning that public authorities and the political class may adopt facing the transformations arising from the technological progress. That is to say, prudence and calmness needed to deepen the subject and obtain an ample perspective, a strategic view of the complicated scenario and some sense of direction.
Therefore, may Brazil search for more principle and fewer rules and understand that although the timing difference between the social-technological transformations and the politics, the most intelligent to do is to abandon punctual approaches and to create a political schedule aiming to amplify and deepen the understanding of the true complexity posed by technological innovation.
